3 man race for Treasury Properties

Three bidders remain in the running to buy a major portfolio of 16 high-end commercial properties once owned by Treasury Holdings, reports the Irish Independent.

The properties were last valued at €270m in February last year and generate net rental income of €23m a year.

The debt is backed by 16 buildings, including the Stillorgan Shopping Centre in Dublin, Merchants QuayShopping Centre in Cork and a plethora of high-end office blocks that include Bank of Ireland’s headquarters on Mespil Road, FAS’s offices on Baggot Street and KPMG’s main Dublin offices.

UK-based London & Regional and US private equity houses Kennedy Wilson and Northwood Investors have been shortlisted by a committee representing lenders that seized the assets over unpaid debts of €368m, according to real estate specialists CoStar News.

It’s understood that London & Regional and Kennedy Wilson have offered cash for the properties while Northwood, which is one of the lenders to the portfolio, is offering a mix of cash and reinstated debt.

A syndicate of international lenders took control of the property portfolio in January after Treasury Holdings was unable to repay €368m of debt when it fell due.

A unit of the German bank Commerzbank is managing the sale process on behalf of lenders and originally received six offers for the portfolio, it said in a note to investors.

The final decision on a winning bid will be taken by a vote of lenders in the complicated debt structure that is secured on the properties.

One complicating feature of the deal is a capital gains tax liability that will fall due if and when the deal structure collapses and is reported to be in the order of €20m. An offer that rolls over a portion of the current loans could allow for a delay in payment of the tax. Source: the Irish Independent.